The Keno Machine Company Withdrew the EGM after the Glitch, Costing Smartville Station 7% of Its Revenues.
Smartville Station, a small bar in the unincorporated village of St. Mary in Johnson County, Nebraska, is struggling to stay in business after its keno machine glitch led to the business paying out large prizes to bar patrons. The keno machine offered 7 jackpots of $500 or more before the bar’s ownership noticed the pattern. Jackpots of $6 thousand and $3 thousand were paid out at a certain point.
The owner of the bar, Susan Goracke, noticed that she was paying a lot of jackpots. Goracke said that she thought the patrons were having a nice run of luck at first. When 7 customers claimed prizes of $500 or more in one night’s time, she knew something fishy was happening.
Investigation by Officials
Goracke phoned Cass County Keno, the machine’s operator, to let them know about the trend. THe operator shut down the device remotely from its head office as soon as they heard what had happened. Cass County Keno sent out a technician to take a look at the keno machine, while officials from the Nebraska Department of Revenue descended upon the place. At first, all involved thought the gaming machine might have been tampered with.
The officials eventually decided that the keno machine had suffered some form of software glitch. Instead the random number generator producing randomized results, the RNG began to produce a pattern of results. Gamblers noticed the pattern and took advantage of the glitch.
County Attorney Considers Charges
Now, officials are beginning to question whether a crime was committed. Johnson County Attorney Rick Smith told the Lincoln Journal Star that he is trying to determine whether to charge any of the gamblers with a crime, because at least some of them admitted to know that the EGM had had a glitch before they started playing.
Cass County Keno Refused Payment to Some
The attorneys for Cass County Keno have decided their stance on the issue. They say that keno is supposed to be a game of chance. If a game has a predictable pattern with advance knowledge of the winning numbers, then it ceases to be a game of chance. In those circumstances, someone playing the machine is breaking the law.
Thus, the situation has turned into a legal fiasco. Cass County Keno canceled the checks issued by Susan Goracke during the two days the glitch was affecting play. The keno machine company eventually issued checks to some of the patrons, based on the ones they had determined were unaware of the glitch. For those who Cass County believes knew about the glitch, the company is refusing to issue checks.
Smartville Station’s Plight
Cass County Keno took the keno machine out of Smartville Station and has no plans to place another EGM in the St. Mary bar. Susan Goracke says the loss of her keno machine is hurting her business significantly. She reports a loss of 7% a month and told the Lincoln Journal Star she hoped another keno machine company would step up to provide her with machine service.
Mom-and-Pop businesses like Smartville Station install gaming machines to supplement revenues. Local communities allow limited gaming opportunities, to help such business remain solvent. Nebraska limits the size of keno wagers, which limits the damage such gaming does to the finances of the rare problem gambler who walks through the door. Researchers estimate problem gamblers make up between 1% and 2% of the gaming population.
Nebraska Gaming Laws
Nebraska is not a hotbed of gambling. The state allows lottery betting and pari-mutuel horse racing, but most casino-style gambling is forbidden. The state has 5 tribal gaming locations in Lincoln, Emerson, Niobara, Winnebago, and Walthill. Nebraska has 4 horse tracks in Omaha, Columbus, Hastings, and Grand Island.
Bingo nights, keno drawings, and raffles are allowed for charitable organizations only. Poker nights are banned. Social gaming has not specific laws against it, though the one gaming laws purportedly regulates “gambling under $300”, so even gaming on social sites might be illegal.
